A step in accountability

Lost amid a cascade of major Supreme Court decisions was the news that the Court will hear a case challenging the legality of President Barack Obama's recess appointments to the National Labor Relations Board. Importantly, this case will also cover the president's appointment of the current director of the Consumer Financial Protection Bureau, Richard Cordray.

Since the organization's creation, critics have been concerned by the lack of any meaningful accountability or oversight, and Cordray's appointment without a thorough Congressional vetting did nothing to soothe those concerns. The court's decision is an important first step, but hardly the only one required, in bringing to heel a government body with the audacity to think it's wise enough to do for consumers what they can't do for themselves.

Though it's an organization that's supposed to represent consumers, the CFPB doesn't have to ask those consumers' elected representatives for annual funding. This shields the agency from lawmakers' most awesome means of accountability – the power of the purse. CFPB is entitled to 12 percent of the Federal Reserve's annual operating expenses, which in fiscal year 2013 totaled $597.6 million.

Any amount requested under that cap is automatically granted. That leaves the CFPB with ample room to spend handsomely on itself. For example, the agency budgeted $95 million in the current fiscal year to renovate its downtown Washington headquarters. That figure is more than the entire annual construction and acquisition budget for the General Services Administration for all other federal buildings combined.

That's just the beginning. The CFPB is not required to abide by salary limits established by the Office of Personnel Management. That's why 58 employees have higher salaries than executive cabinet secretaries, and more than 60 percent of its 1,200-employee workforce earns over $100,000 a year – before bonuses.

These are exactly the types of budgetary excesses that, if committed by other federal agencies, would receive intense Congressional scrutiny during the annual appropriations process. Even if Congress does have suspicions about reckless spending within the CFPB, the organization's founding legal charter prohibits congressional appropriators from altering its half-a-billion-dollar budget

This lack of accountability is all the more troubling when considering the business track records of its Consumer Advisory Board members. Nine of the board's 25 members either presided over recent bank failures or previously reported substantial losses in their operations of nonprofit organizations. This from a group tasked with providing financial advice to low-income families.

A number of the Advisory Board's members also come from organizations the CFPB actively regulates. This coziness was on full display last September when the CFPB awarded a $1.3 million contract to a corporation on whose board a CAB member also sits.

While a court decision that required Cordray to be approved by Congress would undoubtedly be a step in the right direction, critics would do well to keep their eye on the bigger prize, which is instituting structural reforms that increase accountability at the CFPB.